Latest AMA Benchmark Survey Shows Number of Physicians Employed by Health Networks Now Exceeds Those in Independent Practice

As physicians continue to re-evaluate their career strategies, clinical laboratories must closely monitor changes to test ordering from formerly self-employed doctors

For the first time, more doctors are employed by health networks than are in private practice. That’s according to a recent report from the American Medical Association (AMA). In a press release, the AMA describes the event as “the continuation of a long-term trend that has slowly shifted the distribution of physicians away from ownership of private practices.”

This trend impacts independent clinical
laboratories and anatomic
pathology groups because hospital-based physicians have reasons to order
tests from in-house medical
laboratories. Thus, a reduction in independent self-employed doctors could also
mean reductions in test orders from those physicians.

According to the new release, employed physicians made up
47.4% of all patient care doctors in 2018—an increase of 6% since 2012. Meanwhile,
self-employed doctors represented 45.9% of physicians in patient care—down 7% (from
53.2%) since 2012.

“Due to this swing, for the first time in 2018, there were
fewer physician owners than employed physicians,” the AMA researchers wrote in their
report.

The AMA has conducted its benchmark surveys every other year
since 2012. They are nationally representative surveys of doctors to record
employment status, practice size, specialties, and ownership.

“Change continues in the delivery of healthcare and physicians are responding by re-evaluating their practice arrangements. Physicians must assess many factors and carefully determine settings they find professionally rewarding when considering independence or employment,” said Barbara L. McAneny, MD, FASCO, MACP (above), in the AMA news release. McAneny is a board-certified medical oncologist/hematologist, President of the American Medical Association, and CEO/co-founder of New Mexico Cancer Center. (Photo copyright: HMP.)

Who Employs Doctors?

Physicians can be employed by other doctors in
physician-owned practices, by hospitals directly, and by hospital-owned medical
practices.

Most, however, work for other doctors, reported Fierce Healthcare. In a summary of
the latest AMA survey data, Fierce noted that:

54% of doctors are owners, employees, or contractors
in practices owned by physicians—compared to 60% in 2012;

8% of doctors work directly for a hospital—up
from 5.6% in 2012;

26.7% of doctors are employed by hospital-owned
practices—up from 23.4% in 2012; and

34.7% of doctors work for a hospital or a
practice partly owned by a hospital in 2018—up from 29% in 2012.

The AMA partly attributed the increase in employed physicians
to age: 70% of doctors under the age of 40 reported as employees in 2018,
compared to 38.2% of doctors 55 and over who reported as employed.

Family Practice Physicians
Most Likely to Become Employed by Hospitals

Other intriguing data points include the percentages of practice
ownership among medical specialties.

Pathology was not broken out. However, the AMA’s report did state
that, “surgical subspecialties had the highest share of owners (64.5%) followed
by obstetrics/gynecology (53.8%) and internal medicine subspecialties (51.7%).

“Emergency medicine had the lowest share of owners (26.2%)
and the highest share of independent contractors (27.3%). Family practice was
the specialty with the highest share of employed physicians (57.4%),” the
report concluded.

The AMA
researchers also noted that the number of doctors seeking employment in
healthcare networks may be decreasing. “The trend away from physician-owned
practices and toward working directly for a hospital or for a hospital-owned
practice appears to be slowing—more than half of that shift occurred in the first
two years of [the benchmark survey] period [2012 to 2018].”

The AMA also noted that the success or failure of accountable
care organizations (ACOs) could have an effect on hospital acquisition of
private practices. “Should evolving models of care not deliver on their theoretical
savings or improvements, that might put a break on consolidation,” the researchers
wrote.

It’s critical that clinical laboratories continue to improve
the quality and efficiency of outreach services to retain and grow medical
laboratory testing business that increasingly may come from health networks
versus physician-owned private medical practices.